Virus scanner bug cost Trend $8 million

By
Paul Kallender, IDG News Service
| Jul 14, 2005

| IDG News Service

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Tokyo-based anti-virus software vendor Trend Micro said a bug in its own software that affected thousands of customers has cost the company ¥903 million (US$8 million). The issue has also forced it to lower its revenue and profit forecasts for the April to June quarter.

The company reduced its operating profit forecast by just over a fifth to ¥5.5 billion, and lowered its net income forecast 16.7 percent, according to Naomi Ikenomoto, a spokeswoman for Trend Micro's Investor Relations Department in Tokyo.

Sales are now estimated at ¥17.5 billion, nearly 3 percent lower than previously forecast, she said.

The company hasn't lost many corporate contracts over the bug because it's difficult for enterprises to quickly change their anti-virus policies, according to Ikenomoto.

"Maybe we will see some impact next year," she said.

The affair leading to the profit warning began on 23 April when the company released a faulty software update file that sucked up the processing power of PCs that had downloaded it. The file affected mainly PCs using the Windows XP operating system with Service Pack 2 and Trend Micro's OfficeScan PC-cillin Internet Security 2005 VirusBuster software, the company said.

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The company quickly set up a call centre to field enquiries, and issued updates that when uploaded automatically cleared the problem. The ¥903 million costs were largely incurred by the call centre, which operated over weekends and through Japanese public holidays, and by advertising costs, Ikenomoto said.

The number of customer and corporate licensees affected, based mainly on data from calls to the help lines, stand at about 28,300 customers and about 700 corporate licensees, according to the company's latest estimate, she said.

Nearly all of the customers and corporate licensees were based in Japan, she said.

But the company's figures for users affected almost certainly underestimate the real number because not all of the customers who incurred problems from the faulty update contacted the emergency centre, Ikenomoto said.